Market Update

The Greater Phoenix housing market (as a whole) is showing signs that sellers may face tougher times in 2025. With trends shifting towards a more balanced or even buyer-friendly market, sellers are increasingly offering concessions to close deals. On the flip side, buyers, especially Millennials, are showing surprising willingness to compromise on home conditions to secure a purchase. It is important to note that this data is for The Valley as a whole. Individual cities' data fluctuates. As an example, Chandler, Fountain Hills, Paradise Valley, Tempe, and Scottsdale are in the top five (as sellers' markets) while Goodyear, Queen Creek, Surprise, Maricopa, and Buckeye are the bottom five (all as buyers' markets). For this reason, we've included a city-by-city comparison as well. With that said? Here’s what’s happening in the market right now.

Seller Concessions On The Rise

Seller concessions, once rare in competitive markets, have become a significant factor in Greater Phoenix’s real estate transactions. In December, over half of all closings included seller concessions.

• 51% of sales included concessions.
• Median concession amount: $10,000.
• Buyers often use concessions to lower mortgage rates or cover closing costs.
• Concessions impact sellers’ net profits, lowering effective sale prices.
• December sales data suggests this trend may continue into 2025.

Sellers need to be prepared for buyers requesting concessions. Buyers, meanwhile, should confidently include such requests in their offers.

Active Listings Are Piling Up

One of the clearest indicators of market conditions is the number of active listings. This year started with more homes on the market than the same period in 2024, and new listings are coming in fast.

• Active listings rose by 11.9% in early January.
• 2025 started with 20,460 listings, compared to 14,593 in early 2024.
• The pace of new listings is almost double last year’s rate.

Sellers should anticipate increased competition, which often forces price reductions or added incentives to attract buyers. Buyers, on the other hand, have more options than before, giving them negotiating leverage.

Also Read: Housing Market Trends Shaping Early 2025 In Greater Phoenix

Market Strength Indicators Are Weakening

The Cromford Market Index (CMI) shows that the market is teetering between balanced and buyer-friendly territory.

• Overall CMI: 91.3, with 90–110 considered balanced.
• Demand: 24% below normal.
• Supply: 77% below normal.

Several cities, including Surprise, Maricopa, and Buckeye, have already dipped into buyer-friendly markets. Although some areas are improving slightly for sellers, momentum is slowing.

City By City CMI Breakdown

While this blog has largely focused on trends for the entire Greater Phoenix metro, it’s essential to take a closer look at individual cities and how they’re performing based on the Cromford Market Index (CMI). The CMI measures the balance between supply and demand, with numbers above 100 favoring sellers and below 100 favoring buyers. Below is a breakdown of the 17 cities measured, including their current CMI, percentage change from last month, and last month’s CMI.

• Chandler: 160.8 (15% increase, 140.2 last month)
• Fountain Hills: 146.6 (6% increase, 138.9 last month)
• Paradise Valley: 144.6 (23% increase, 117.6 last month)
• Tempe: 142.9 (19% increase, 119.6 last month)
• Scottsdale: 138.0 (12% increase, 123.3 last month)
• Gilbert: 131.6 (21% increase, 108.8 last month)
• Phoenix: 124.1 (6% increase, 117.6 last month)
• Glendale: 121.0 (10% increase, 110.5 last month)
• Mesa: 115.9 (14% increase, 101.8 last month)
• Avondale: 111.8 (2% decrease, 114.6 last month)
• Cave Creek: 110.2 (5% increase, 104.8 last month)
• Peoria: 105.5 (14% increase, 92.8 last month)
• Goodyear: 78.7 (10% increase, 71.6 last month)
• Queen Creek: 70.5 (7% increase, 65.9 last month)
• Surprise: 68.4 (3% decrease, 70.6 last month)
• Maricopa: 53.5 (6% decrease, 56.8 last month)
• Buckeye: 53.0 (unchanged, 53.2 last month)

As this data shows, many cities are moving towards stronger seller conditions, but some areas, like Avondale, Surprise, Maricopa, and Buckeye, are seeing stagnation or declines, hinting at buyer-friendly opportunities. Each city’s unique data contribute to the broader trends in the Greater Phoenix housing market.

Also Read: Details About 5 Of The Fastest Growing Areas In Greater Phoenix

Millennials’ Surprising Compromises

Millennials, the largest generation of homebuyers, are desperate for affordable housing. A recent survey revealed surprising trade-offs they’re willing to make:

• 57% would buy a home with cigarette smoke odors.
• 41% would consider homes with asbestos or pest issues.
• 40% are willing to buy homes with leaky roofs.
• 35% would purchase homes with foundation problems.

For sellers, this may mean your property has appeal even if it’s not perfect. However, affordability remains a key concern, with 44% of Millennials worried about finding a reasonably priced home.

Pending Home Sales & Cancellations

Pending home sales have slowed significantly, with December 2024 marking one of the sharpest declines since 2022.

• Pending sales dropped 4.5% from November to December.
• About 16% of contracts were canceled in December, the highest on record for that month.

Higher mortgage rates are a major factor, with current rates hovering around 7%. Unless rates fall, buyer activity is likely to remain subdued.

The Outlook For 2025

The spring season often brings a surge in activity, but the current trends suggest sellers may need to adjust expectations. Rising inventory, buyer demands for concessions, and high mortgage rates all point to a market favoring buyers.

For sellers, pricing competitively and preparing for concessions are critical. For buyers, it’s a good time to negotiate and explore less conventional financing options, like loan assumptions.

The Greater Phoenix market is shifting, and staying informed is the best way to navigate these changes. If you're looking to invest, we welcome you to learn about our brokerage's full-time Greater Phoenix real estate agents. And of course, stay tuned for updates as we move into the spring selling season!